Written Commentary
GOLD & SILVER
Gold is lower this morning after a failed attempt to follow through on Friday’s rally. Friday’s hot CPI number continues to reverberate across the financial markets, with the dollar higher and stocks and bonds expected to come in sharply lower, and this is feeding volatility in gold. The market to reacted Friday’s CPI with a sudden reversal and rally, despite sold gains in the dollar. Once again, silver was a laggard. It did manage to bounce off its lows and close higher on Friday, but it did not manage a technical reversal.
PALLADIUM & PLATINUM
The PGMs bounced off their lows on Friday after a higher-than-expected CPI report, but their moves were nowhere near as impressive as gold, as they closed lower on the day, and resumed their downtrends overnight. Whereas gold found strength from its role as an inflation hedge, platinum and palladium, which are more dependent on supply/demand fundamentals, were limited by worries that the Fed will be forced to become more aggressive and will be willing to risk a recession in the name of fighting inflation.
COPPER
Copper prices remain on the defensive and are on-track for a third heavy loss in a row. Since reaching a 6-week high on June 3, the market has only had one positive day, as demand concerns in China and around the world globe continue to weigh on prices. Unless there is a significant rebound in global risk sentiment, look for further declines this week.
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